COMMISSIONER OF INCOME TAX Vs. M VYKUNTA RAO

JUDGEMENT

(1.) The Income-tax Appellate Tribunal made this reference at the instance of the Revenue under section 256(1) of the Income-tax Act, 1961. The reference relates to the assessment years 1972-73, 1976-77 and 1977-78. The question referred for consideration is :

(2.) The assessee was a partner in a partnership firm in his capacity as karta of a joint family. His minor sons were admitted to the benefits of the partnership. The Income-tax Officer held the view that the share income of the minor sons was includible in the hands of the assessee as an individual under section 64(1) (iii) of the Income-tax Act for the assessment year 1972-73.

(3.) For the assessment years 1976-77 and 1977-78, the assessee seceded from the partnership firm leaving only his minor children as partners. For these two assessment years, the income arising to the minors from the partnership was taxed in the hands of the assessee as an individual.